Sponsored by Oregon Business

Charitable giving: Uncovering hidden benefits

| Print |  Email
Monday, May 01, 2006

by Greg Chaillé, president, Oregon Community Foundation

Whether your business has an established plan for charitable giving or is just getting started, it is important to know how much of the philanthropic contributions your business makes can be deducted for tax purposes.

It can be daunting to navigate the complex tax structure for charitable giving. For instance, because the IRS treats business expenses differently from charitable contributions, it is essential that you are precise about the deductions you claim.

The following information applicable to Oregon businesses is based on contributions made to 501(c)(3) corporations and does not cover all types of charitable giving.

Business Structure Who Receives Deduction Allowable Deduction
C corporation Corporation Up to 10% of a business’s pre-tax profit in the year of the donations. Contributions over 10% can be carried over for five years.
S corporation Individual owner(s) Up to 50% an of individual’s adjusted gross income in the year of the donations. There is usually a five-year carryover.
Partnership Individual owners Up to 50% of an individual’s adjusted gross income in the year of the donations. There is usually a five-year carryover.
Sole proprietorship Individual owner Up to 50% of an individual’s adjusted gross income in the year of the donations. There is usually a five-year carryover.

The next chart summarizes IRS regulations for deductions. For greater detail on the regulations that are specifically applicable to Oregon and your organization or business, you must consult your tax adviser.

Type of contribution Charitable deductions Business expenses
Direct cash donation Yes. However, if you receive any benefit in return, you must subtract the value of that benefit from the amount of your deduction. No.
Cash given to employees to donate to charities of their choice Yes. No.
Sponsorship Yes, if not directly related to business. Yes, if directly related to business.
Purchase of ad in nonprofit publication Yes, if you don’t expect to earn at least the cost of the ad as a result of its publication. Yes, if you expect to earn at least the cost of the ad as a result of its publication.
In-kind gifts of products Yes, for the value of your costs, not market value. However, inventory donations by C corporations to benefit the ill, the needy or infants, and gifts of scientific equipment used for research may be eligible for higher-value deductions. No. Be sure not to deduct your costs as both a business expense and a charitable contribution.
Depreciable property Yes. Fair market value less prior depreciation. No.
Stock Yes, of both C and S corporations. Deductions can be made for fair market value if held by the donor for more than one year. No.

— Greg Chaillé, president, Oregon Community Foundation, www.ocfl.org.
The Oregon Community Foundation offers advice on the tax benefits of setting up a business or family foundation and provides guidance for charitable giving.

More Articles

The Harder They Fall

November/December 2015
Wednesday, October 28, 2015

Storyteller-in-Chief by the managing partner of Schwabe, Williamson & Wyatt.


Meet Me at the Crossroads, ESPN

The Latest
Friday, October 30, 2015

Worldwide Leader in Sports struggles to cope with new media landscape, forcing us to adjust our behavior as consumers.


Keep Pendleton Weird

October 2015
Monday, September 28, 2015

Eastern Oregon marketers refocus rural assets through an urban lens.


5 facts about the teaching profession in Oregon

The Latest
Thursday, October 08, 2015

Based on several metrics, Oregon has one of the lowest performing K-12 education systems in the country. Teacher compensation is part of the problem.


Have a baby and keep a job? It won’t be easy in Portland

The Latest
Friday, October 02, 2015
100115kimblogthumbBY KIM MOORE

Our intrepid (and expecting) research editor finds the child care search involves long waiting lists, costly fees and no certainty of securing a place before she goes back to work.


OEN takes Portlandia route in new video

The Latest
Tuesday, October 27, 2015
Screen Shot 2015-10-27 at 3.27.58 PMBY JACOB PALMER | DIGITAL NEWS EDITOR

Several Portland entrepreneurs make appearance in patently silly "The Dream of the Startup is Alive in Oregon" promo.


Where Do We Go from Here?

Guest Blog
Wednesday, October 21, 2015
102115-thumbBY JASON NORRIS | CFA

Volatility reigned supreme over the summer. The old Wall Street adage of, “Sell in May and go away,” was prophetic in 2015.

Oregon Business magazinetitle-sponsored-links-02